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Negotiations Continue in Budget Stalemate

LOS ANGELES (KCBS) Assembly Speaker John Perez said the key to reaching a budget deal for California is a new tax on oil.

Perez spent much of Friday briefing Los Angeles-area mayors on the Democrats plan to erase the $19 billion deficit without the deep cuts to programs that Governor Schwarzenegger is proposing.

Budget negotiations will resume this weekend and Perez said his budget plan depends on nearly $9 billion that would come from a severance tax on oil companies.

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"That is crucial to the financing of our proposal," he said. "This is an idea that the Assembly and the Senate Democrats are in agreement on and it is the foundation for the negotiations that we're engaged in with the governor and the Republican leaders."

Republicans continue to oppose the proposal and the governor said he won't sign a budget unless it includes budget and pension reforms, without further increasing taxes.

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